Notebook with property tax sign on a tableReal estate experts know that a person can only guarantee a couple of aspects of his life: death and taxes. This is why individuals who want to invest in real estate must know what they will be getting themselves into in exchange for their dream property. Plenty of factors surround real estate, but people should be aware of the taxes and fees involved when looking at listings.

Land Estimate cites the things the buyer is responsible for.

  1. Registration Fee
  2. Transfer tax, which is enforced on any method of handing over ownership of a real estate property. It can be through barter, sale, donation or other modes.

Meanwhile, the seller would have to take charge of the following taxes and fees:

  1. Income tax is taken if the property they are selling is considered an ordinary asset.
  2. Percentage or Value-Added tax if the property they are selling is deemed an ordinary asset. There is a 12 percent-imposed VAT on sales of those engaged in the business of developing, subleasing or leasing, and selling a property.
  3. Creditable withholding tax is the tax withheld by the withholding agent or buyer. This is taken from the payment to real estate entities, persons, operators, developers, and dealers considered being regularly involved in real estate business.
  4. Capital Gains assumed to be taken from the sale of a property that is not considered as an ordinary asset is accountable for a six percent tax. This will depend on the highest among the evaluated value of the city or provincial evaluator, Bureau of Internal Revenue (BIR) zonal value, and the selling price.
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The different taxes and fees that both parties are responsible for will depend on the particulars of the specific property. Anyone interested in engaging in a real estate venture will now have an idea of what they will come up against.